Posted
by
Unknown Lameron Tuesday March 20, 2012 @05:10AM
from the conversation-via-lawyer dept.

Fluffeh writes "Word from Ars Technica is that OnLive, a service provider that seems to totally flout Microsoft licensing and offers iPad users a Microsoft Desktop for free (or a beefier one for $5) isn't being sued by Microsoft, as this blog quotes: 'We are actively engaged with OnLive with the hope of bringing them into a properly licensed scenario.' The people who are angry include Guise Bule, CEO of tuCloud. He accuses Microsoft of playing favorites with OnLive — whose CEO is a former Microsoft executive — while regularly auditing license compliance for companies like tuCloud that provide legitimate virtual desktop services. Bule is so mad that he says he is forming an entirely new company called DesktopsOnDemand to provide a service identical to OnLive's, complete with licensing violations, and dare Microsoft to take him to court. Bule hopes to force Microsoft into lifting restrictions on virtual desktop licensing that he says inhibit growth in the virtual desktop industry, and seem to apply to everyone except OnLive."
One of the restrictions applied to licensed remote desktop providers is that each user must have his own dedicated machine (pretty onerous in the days of 16+ core servers costing a mere grand or two).

The reason OnLive gets a pass is because OnLive is a rapidly growing business dominating a completely different market (virtualized gaming) run by a veteran player in the industry, while toCloud is a rinky-dink outfit that has no real prospects for large growth that has to keep telling the world how they are "Virtual Desktop Superheroes" because its so easy to forget.

Gifts above a certain value are taxable. I'm not sure if that counts for gifts between companies. The story about Inida taxing "angel funding" is similar to this, and if one company is creating an uneven playing field by giving gifts to another company then that is not desirable in a free market. It could even come under antitrust, if they are doing this to increase Windows' market share in the mobile virtual desktop space.

I think that is appropriate for trademarks, but I don't think it is for copyright. This is a trade issue and so should be addressed by the FTC - it could be monopolistic practice by Microsoft, or it could be a taxable gift to OnLive.

Why not? A publicly traded company's only duty is to make money for its shareholders... That duty is not incompatible with the goals of favoritism in other markets... If OnLive comes to dominate its market, while still being utterly dependent on MS, then MS will have huge leverage over them and be able to take the lion share of the profit.

Why not? A publicly traded company's only duty is to make money for its shareholders...

Can we stop already with the incorrect summary of Ford vs. Dodge Brothers?

Most state codes permit, or even require, incorporators toinclude a statement in the corporate charter that defines and limits thepurpose for which the corporation is being formed. If the corporation'sfounders so desire, they can easily include in the corporate charter a recitationof the Dodge v. Ford view that the corporation in question "is organi

That's one way to look at it. The other is that Microsoft's favouritism has allowed OnLive to grow rapidly and dominate a complete market, while tuCloud has been forced into being a rinky-dink outfit with no real prospects due to Microsoft's abuse of their OS monopoly.

The other way to look at it is that OnLive have been poking around this concept for several years, and are engaged in a private dialog with MS, while this bloke has only been public for a few months and has only talked to the wrong people (the Ars comments point out that he only talked to the RDP guys at MS, not any licensing specialists).

The fact that there would be need for a "licensing specialist" speaks volumes about the complexity of navigating the Microsoft licensing system. I think the major problem that MS is trying to stop is from somebody offering the same functionality to desktop users. Imagine a system where Mac and Linux users wouldn't have to buy a Windows license to access a full windows desktop. This could make switching to Mac (or Linux) a lot easier for most people. MS would sell a lot less licenses if a single license could be time-shared between 20 or 30 users

A single license can be time shared between 20 or 30 users, it just has to be on its own machine.

I've done the whole MS licensing dance, as part of a budget where I was responsible for $1.5million of buying, and to be fair MS licensing is fine in 99% of cases, but it's that other 1% which you need help for. And this falls into that 1%, because neither OnLive nor this guy want to do what most other businesses want to do.

Insightful? Really? Have we met? Hi this is the USA the most sue happy place on earth! if you don't have every damned thing with a bazillion pages of lawyerese full of CYA and you have MSFT money? Prepare to have you ass hit harder than a Bangkok whore on coupon day. like it or not the laws are written by lawyers who naturally want more business. you don't dot them Is or cross them Ts then SOMEBODY will nail your ass if you got cash, and MSFT has got cash. I bet if you look at Apple and Google business cont

Actually I don't think any licence is ever simple for anyone except lawyers, and sometimes is still only an interpretation.

My company was trying to determine if we could use the free version of Google Maps, but the licence didn't make it clear. In the licence Google says not to contact them about the agreement, but consult a lawyer.

No, you aren't completely informed. No generally available MS license currently allows for the virtualised provision of Windows 7 as a hosted service - only the Server 2008 licenses allow virtualised service provision. He could do what he wants with the right Windows Server license, but he can't offer a virtualised Win 7 instance in the same manner.

2. Virtual Desktop Access (VDA)The second licensing vehicle for virtual desktops is Virtual Desktop Access (VDA), which is a new license that will come into effect on July1st, 2010. Customers that want to use devices such as thin clients that do not qualify for Windows client SA would need to license thosedevices with a new license called Windows Virtual Desktop Access (Windows VDA) to be able to access a Windows VDI desktop.Windows VDA is also applicable to 3rd party devices, such as contractor or employee

And again, that doesn't contradict what I have said - VDA requires you to issue a license to a given device, it doesnt allow you to swap licenses around between devices ad hoc. That means you cannot provision a virtualised Windows 7 license for a hosted service, in the way that this guy wants - he would have to have one Win 7 license associated with each end user device.

Again, there is no current license which allows you to sell a virtualised Win 7 hosted service.

Exactly, the major problems are that the VDA license is *per device* instead of per user, that the license is only available to volume license customers, and that MS has told hosting providers that they must maintain separate physical servers and *storage* for each customer. Almost every other piece of MS software is available to service providers under reasonable rental terms so that they can provide their customers a convenient service, it's only the desktop license where MS has repeatedly refused to offer terms that their end users and service provider partners find reasonable.

RTFM, this guy is following the rules, to the letter. That means he can only offer the service to people that already pay monster money to Microsoft (and THEN they have to pay him too)

in short his company is ALREADY a customer playing by the established rules (and being audited) trying to ask permission to add more features. While the OnLive people should be raided by the BSA marshals by now... they're getting "talked to" about licensing violations that would get a proper business' doors locked because they've already whipped up huge business in the press.

When Microsoft trots out "piracy" numbers, licensing technicalities like this are EXACTLY what they are going after nowdays. If their "war on piracy" was REAL they'd be sending the BSA with Federal Marshals to lock up OnLive. If there is some new rule that OnLive is getting, why shouldn't the people that ALREADY PAY to have the same feature get the new rules too? Microsoft is still a monopoly and giving new terms to somebody that's not properly paying shouldn't be allowed... as they are interfering with their PAYING customer's business by allowing this.

If you own a volume license, yes, they can do that, and there's not a damn thing you can do about it.

There is no such thing as a volume license for Windows -- there's enterprise agreements, and you get a volume license key, but that key is only valid if used to replace the OEM key that comes with new hardware. (I.E., its provided to EA customers so you can push out desktop images to your hardware, but you can only do so to hardware that *came* with an OEM license. There's no concept of a "new" VLK license.)

The *only* legal option companies like this have are getting an OEM distribution license (which Microsoft doesn't do for non-hardware vendors), or use full retail copies. There's nothing MS can do to prevent OnLive from using full retail copies, but at $200ish a VM, the cost to the end user goes up. And what you can't do is use guest accounts and published applications from the cloud, because you don't have CALs for those users.

There are routes that companies can do to make it work, but not routes that somehow magically bypass the cost of buying Windows.

So I'm curious, what licensing scheme must services like AWS or other virtual desktop services use? If I sign up for a virtual Windows instance at an hourly price, and stop the instance after a few hours, I will pay much less than $10.

Do they buy a bunch of licenses, and then only allow that number of virtual machines to run at a time? Does Microsoft offer a virtualization license?

These companies are about providing either terminal services infrastructure or VDI infrastructure, both of which don't have license types for that kind of service. (Note, AWS doesn't have the terminal services role, for example.)

And since when can MSFT not sell what it wants to who it wants? if I own a company I can decide to sell to Joe but not to Bob, as long as i'm not doing it because of race/creed/religion/etc so if I am friends with joe and want to give him a better deal WTF is it any of bob's business? if he don't like the terms he is welcome to talk to Apple or build his own Linux. I am getting so damned tired of this "Waah we don't like the way you do business so we should get to do what we want waaah!" bullshit. you want

Poor Billy, he's gonna be stuck with that dumb quote that ain't even his forever. I wonder how many times a year he gets asked about that thing? Its like poor old Robert Wuhl who bitches that he did Batman and all this other stuff and to this day what do people ask him when they meet him on the street? "Hey can you still fart Volare?" that quote is Billy's Volare hell I wouldn't be surprised if his gravestone said 'I never said anything about 640k dammit!"

He's starting a brand new business. I'm sure he's incorporating it, both because he has to incorporate it in some format and because of the legal insulation it provides. He'll pick the state that is most unfriendly to the concept of piercing the corporate veil (since courts are required to use the laws of the state the business incorporates in). He doesn't care one whit about the business or its would-be customers; he's starting it just as a slight

Is there any actual reason (antitrust, etc.) why Microsoft would have to give OnLive the same licensing grant as everyone else? I can imagine Microsoft simply having arranged an alternative licensing deal with them.

This is not a hard concept you don't poke the bear. Its one thing to setup a service they might like for some reasons and hope they ignore your strained interpretation of the license agreement it's another dare them to sue. Microsoft has an in house legal team, I am sure one or more of those people need a project, this could cost Microsoft next to northern and this guy everything. The only reason I can see to do this is breaking the agreement in court but I doubt that will happen

"However, unlike with Office, Windows licensing has been heavily scrutinized ever since the Consent Decree Microsoft signed with the Department of Justice, so it just isn’t possible for Microsoft to cut special deals without getting into legal hot water."

According to this article over at ExtremeTech, Microsoft isn't allowed to have separate licensing deals for Windows.

I don't see why Microsoft have to use the same licensing terms for different customers.

I'm prett sure that they charge OEMs a completely different price than retail customers. That doesn't mean that retail customers can demand that OEMs are shut down.

The only obligation Microsoft has to properly licensed customers is to allow them to use their products as defined by the license. What they do with/for other customers is entirely their business as long as they aren't breaking the law (e.g. abusing a monop

I don't see why Microsoft have to use the same licensing terms for different customers.

Because they're a monopoly, and per-customer pricing is ripe for abuse. Basically, any license any MS customer gets, anybody else should be able to get on the same terms (which includes volume, so the OEM/consumer distinction will still work for them).

Haven't you ever heard the saying "no one pays list price" in relation to Microsoft licensing? We hear it all the time (as a public health department we actually get two levels of discount on our purchasing!)

Who are tuCloud? Never heard of them until today, and after this opportunistic publicity grab I probably never will again.

It is always easier to ask forgiveness than permission, but it's easier to find forgiveness when you have a sizeable number of users. Money talks. There's nothing special about OnLive. If any successful company with actual users did the same thing, Microsoft would see an income stream waiting for them, rather than an insect

DesktopsOnDemand will be a different corporate entity. In otherwords MS can sue DesktopsOnDemand into the ground and tuCloud will be unscathed. The guy is setting up another company that CAN go down in flames and just be scrapped if needed. As someone who's been harrassed by MS in the past I have to say I love this idea and I find the whole thing intensely entertaining.

I would suspect the courts would frown on his intentions and likely sweep aside the corporate protections. I've never seen a court back a director who deliberately set up a company in order to break the law or defraud other individuals/companies.

I would suspect the courts would frown on his intentions and likely sweep aside the corporate protections.

Of course they will, which is why he's setting it up as a different corporation. In contries like America corporations are entities - he's making a new corporation specifically so it can be ragdolled (have the crap beaten out of it) and then just thrown away.

I've never seen a court back a director who deliberately set up a company in order to break the law or defraud other individuals/companies.

Is this your first time reading Slashdot? There's a few stories a month about situations just like that. Hell there's cases of -governments- backing and giving special protections to companies that defraud individuals/companies. Even in my country it ha

There's no practical way to put 4 GPUs in a 16-core machine and have them virtualized, one each, to 4 instances of Windows

Yes, there is, it just requires hardware that is not present in consumer-level machines (PCI-SIG IO Virtualization, example implementation [virtensys.com]). Or alternatively, you can use GPU-accelerated emulation of a virtual GPU as (e.g.) vmware is capable of... that doesn't even require 4 GPUs to be present, although you can only expect approximately 20% of the performance of the host GPU in the virtual machines (direct IO virtualization should be faster than this).

It's bad enough that each machine has to do video compression as well as running the game.

There's a short blog posting and longer report extract on MS licensing for VDI for multi-tenant service providers over at 360.It clarifies the position based on discussions with the major vendors involved (Microsoft, VMware, Citrix).http://360is.blogspot.co.uk/2012/03/microsoft-virtual-desktop-licensing.html

Who knows what the situation will be next week/month, but it's a decent explanation on what the state of play is today.

If MS actually stopped all unlicenced use of Windows then they'd soon be a minority OS, they rely on piracy to give them the bulk of the desktop market share. How many people do you know who've actually bought a copy of Windows? It's mostly OEM installations, and when it stops working most people have it replaced by an unlicensed version by a "mate with a disc".

If MS actually stopped all unlicenced use of Windows then they'd soon be a minority OS, they rely on piracy to give them the bulk of the desktop market share. How many people do you know who've actually bought a copy of Windows? It's mostly OEM installations,

OEM installations are not pirated copies they are completely legal and have been paid for and officially bought. Not to mention how many companies are out there running Microsoft Windows in business with Site licenses.

The complaints from tuCloud aren't new for those in this space of IT. Brian Madden and several other forums / experts in the field have commented on the issues with MS Licensing and OnLive going back at least a year.

Here is the latest I have seen on the issue:http://www.brianmadden.com/blogs/gabeknuth/archive/2012/03/09/gasp-turns-out-onlive-really-isn-t-in-compliance-with-microsoft-licensing.aspx

The real issue isn't that tuCloud is small and complaining, but rather MS is vastly limiting the use of possible

I thought twice before writing this. I know 1000 Windows liking Slashdotters are going to mod this down and call me a Linux fanboi but really? This kind of courtroom arguing seems so petty when viewed from the outside when so many great OSs are free for as many users as the hardware can handle. I just don't get what there is to Windows that is worth licensing at all. Don't get me wrong, it is much more stable than it was 10 years ago but what is special about it? Nothing that I can see...

Actually, I work in a Microsoft shop. I use Linux at home only now though I have used it in the workplace at previous jobs. It's not that I think Windows is that BAD. I agree, much of what made it suck back when I switched to Linux is better now, that's what I meant by the stability comment although it's more than just that. I just don't see anything special about Windows. I just went to Best Buy. They want $200 for the home edition of Windows. I've never been a fan of the 'Home' versions but I'll use

This is going to blow up big, for both MS and TuCloud, I think. Considering the obvious intent Microsoft has with pushing Windows 8 as a service instead of a product (as they're already doing with Office 365 and will be tying the next version of Exchange), they're probably going to try to lock any competition out.

I'd not be surprised if OnLive is a project planned internally to Microsoft, and they moved it "outside" to avoid scrutiny and/or Justice Dept. probes, or something like that. The "offer" they'll g

How do they know OnLive don't have a private agreement with MS for licensing? Just because MS make the terms extortionate to everyone else, doesn't mean they can't have a special agreement with OnLive that effectively forces any competitors out of the market. That's what happens when you build a business that depends on a single supplier, they can enter the market themselves or favour your competitor and your utterly screwed.